Oncology landscape stays hot for dealmakers

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Jamie Munro

Intense competition for dealmaking in oncology “shows no sign of abating.” That’s the key takeaway from recent analysis developed by Jamie Munro and Helen Dowden, of Clarivate Analytics. Their article, “Oncology dealmaking trends”, was featured in the Biopharma Dealmakers supplement to Nature Biotechnology and Nature Reviews: Drug Discovery.

Munro, global practice leader, portfolio and licensing, at Clarivate, spoke recently about the robust outlook for the sector.

Q: You’ve written analyses of the dealmaking landscape in oncology in back-to-back years. What has changed?

Munro: Overall, oncology remains a hugely hot area. One of the things we noticed this year is that there has been a lot of activity and interest in earlier stage deals. It is difficult to know how much of that is down to a lack of supply of clinical stage deals, or that companies are more willing to take the risk and go earlier, or because they believe it’s less risky to do so now.

Also, immuno-oncology, which was already a significant area a year ago, really is dominating deals relative to other parts of oncology.

Q: The Bristol-Myers Squibb-Celgene deal – at $74 billion – got everyone’s attention one week into the new year. What does the merger of those two players mean not just for oncology dealmaking but for the industry as a whole?

Munro: No one knows for sure, but it’s going to be fascinating. Are we at the start of a new wave of big deal making or is this more of a one-off?

One of the players – Celgene, obviously – is big in the biotech space. What does it mean for the likes of companies like Gilead, the biotech players that people may be looking at it? Is this a bellwether? Does it create pressure on them?I think the answer is likely to be: yes, it does.

Meanwhile, the jury is still out on productivity. Volumes have been relatively good in the last few years, but there is still a big question over big pharma’s ability to generate sustainable value and affordable medicines.

Q: Your analysis in Nature includes a focus on how Chinese companies have become active in-licensors of oncology assets. Will that continue?

Munro: The uptick is significant when you look at the region. The total is still relatively small when compared to the U.S., but it’s the pace of acceleration in China that catches your attention. And when you look at the companies behind the deals, the backers, they are big players in the region. So, it’s hard to see how we won’t see strong activity there going forward.

Q: We liked the phrase “technology drivers” in your Nature article. Which technologies do you anticipate will continue to drive dealmaking in oncology?

Munro: It’s obviously focused around immuno-oncology. We’ve seen big activity around CAR-T. Some of the technology is still not there yet – for patients – but we are seeing huge progress in things like CRISPR and gene editing. Anything around those hot areas that we have already seen and around cell and gene therapies more generally are likely to lead to sustained interest and attract significant premiums.

Q: Will the space stay hot, perhaps warranting another follow-up in 2020?

Munro: The ingredients are there for it to stay hot. Number one, we have the productivity challenge. Several companies are struggling to be successful and to deliver sustainable returns. It takes more than a decade in some cases to turn the big ship around, the R&D ship, from start to end, and most CEOs aren’t in place for that long. But one of the areas where they can make an impact more quickly is through business development.

Secondly, companies continue to struggle with other therapeutic areas – when we look at neuroscience and neurodegenerative diseases, for example – you can see that there will be even more interest in areas such as oncology that have proven to be more successful and less clinically demanding at least in some respects.

Then let’s not forget the regional aspect, as well. We talked about China. One of the things we noticed that’s really pronounced with China is the area of focus: They are investing heavily in immuno-oncology – in oncology in general, but especially in immuno-oncology. They are placing their bets squarely in this area.

Dive further into the oncology sector and hear best practices for partnering in the webinar, “Oncology Investment & Partnering Trends,” sponsored by Clarivate Analytics and the Biotechnology Innovation Organization (BIO), originally presented on May 9.

Sarah Hardison, Clarivate’s therapeutic area director, and Willie Reaves, director, partnering, products & services at BIO, are the featured speakers.